BAT Kenya, the cigarette manufacturer, reported a 22.4 percent net profit growth in the financial year December 2018 owing to strong demand and reduced costs of production.
During the period under review, BAT, which is listed in the Nairobi Securities Exchange (NSE), recorded net earnings of 4 billion shillings as opposed to 3.3 billion shillings recorded in the 2017 financial year.
The exports market highly contributed to the strong demand which pushed the company’s net sales to 11.1 percent representing 20.7 billion shillings.
BAT declared a final dividend of 31.5 shillings a share, which brings its payout to a total of 35 shillings a share. On record as of March 14, the final dividend will be paid on May the 10th.
The declared dividend represents a payout of 85.6 percent of the net earnings.
Compared to the 2017 financial year payout, the amount represents a 34.6 percent increase from the 26 shillings per share or 2.6 billion shillings.
According to BAT, the company performed well in Kenya and across its export markets to deliver a strong set of results in 2018.
However, the performance would have been even stronger were it not for a spike in the sale of fake cigarettes in Kenya.
“However, the performance was dampened by the negative impact of illicit trade in cigarettes in Kenya, the incidence of which rose from 12.4 percent in December 2017 to 14.1 percent in December 2018 — reducing sales and denying government much-needed revenue,” the company said.
BAT’s performance has also been attributed to a 31.5 percent drop in costs from 494 million shillings to 338 million shillings.
BAT, besides the cigarette export, also sells cut rug – semi-processed tobacco – to other countries such as Egypt